The Whale That Nearly Drowned The Donald

In January 1992, a Japanese one-time billionaire named Akio Kashiwagi was found dead in his palatial home near Mt. Fuji. The scene was gruesome. The house’s white paper screens were spattered with blood. The 54-year-old had been stabbed as many as 150 times. By some reports the weapon of choice was a samurai-style sword.

The crime was never solved, though it bore the hallmarks of a killing by Japan’s criminal yakuza. Ostensibly a real estate investor, Kashiwagi was a mysterious figure reputed to have underworld connections. He was also one of the world’s top five gamblers, a “whale” in casino parlance, willing to wager $10 million in a single gaming bender.

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And that is how he crossed paths with Donald J. Trump, then a budding Atlantic City casino mogul. In 1990 the two men had an epic and remarkably personal showdown in which millions of dollars changed hands in a matter of days, before it all ended in a flurry of recriminations. One of the Japanese mogul’s last statements to the U.S. media, through an aide, involved his plans to burn a copy of Trump’s book, The Art of the Deal.

After his murder, the New York Times reported that he owed at least $9 million to casinos in Atlantic City and Las Vegas. One unnamed casino Atlantic City executive told the paper that Kashiwagi had owed the Trump Plaza Hotel and Casino $4 million.

Trump is obsessed with winning, a topic he usually brings up in the context of his merciless deal-making style. But a crucial question about any would-be president who may be confronted with questions of war and peace is his attitude toward risk. Some presidents—Barack Obama comes to mind—are highly averse to it. Others roll the dice, as George W. Bush did when he invaded Iraq.

The story of Akio Kashiwagi, drawn from Trump’s memoirs and news accounts from the day, offers a revealing window into Trump’s instincts. It shows that Trump isn’t just a one-time casino owner—he’s also a gambler, prone to impulsive, even reckless action. In The Art of the Comeback, published in 1997, Trump explains that until he met Kashiwagi, he saw himself as an investor who dealt only in facts and reason. But his duel with the great whale in action made him realize “that I had become a gambler, something I never thought I was.”

Perhaps just as important, when gambling failed him, Trump didn't quit: He doubled down. But he did it shrewdly, summoning a former RAND Corporation mathematician to devise a plan that would maximize his chance of fleecing his Japanese guest.

And it worked. Kind of. In Trump’s recollection, which he shared for this story, his showdown with Kashiwagi was another one of his many great wins. Just don’t look too hard at the ledger.

***

In February of 1990, Donald Trump flew to Tokyo, where he was promoting a heavyweight bout between Mike Tyson and Buster Douglas. At a party for friends and business partners the night before the fight, Trump took Tyson around the room for photos. When Trump spotted one man standing alone in a corner, the mogul threw his arm around him and positioned him for a shot with Tyson.

“No picture! No picture!” the man shouted, covering his face.

That man was Akio Kashiwagi. By then Trump had been courting the mysterious businessman for weeks, hoping that, with some luck, his seemingly limitless bank account could help keep Trump’s latest business venture afloat.

A few years earlier, Trump had begun an aggressive move into the Atlantic City casino business. He had three hotel-casinos under his belt, including the Trump Taj Mahal, modestly dubbed the “eighth wonder of the world.”

But those enterprises required huge revenues to turn a profit. Retirees playing their Social Security checks would only get Trump so far. High rollers promised not only quick winnings, but that lifeblood of Trump’s career: publicity.

Kashiwagi fit the bill. His game was baccarat, a fast-paced card game similar to blackjack that is favored by James Bond. And he bet big, wagering up to $250,000 per hand. He was also a murky figure. The son of a carpenter, he claimed income of $100 million per year and assets of $1 billion, owned a palatial Tokyo home and retained a private chef who cooked him marinated monkey meat. But an independent assessment found his real estate business had revenues of only $15 million and a handful of staffers. Rumors swirled about his ties to the yakuza—perhaps explaining his aversion to photographers.

The high-roller world is small, and the highest rollers are discussed among top casino owners. Trump first heard about Kashiwagi from the late Sir James Goldsmith, a European financier and casino owner. Kashiwagi had recently won nearly $20 million at Goldsmith’s Diamond Beach casino in Australia, almost bankrupting it. But he’d also blown $6 million on baccarat at Steve Wynn’s Mirage casino in Las Vegas a year earlier.

Trump’s top casino executive warned him against inviting Kashiwagi to Atlantic City. Too risky, he said. Trump couldn't resist. He told Kashiwagi there was a penthouse waiting for him at the Trump Plaza. Kashiwagi, in turn, was “eager to match stakes with the famous Donald Trump,” John O’Donnell, then the casino’s chief operating officer, wrote in a memoir.

A few days after dodging the photo with Trump and Tyson, Kashiwagi arrived in Atlantic City. Trump greeted him with an autographed copy of The Art of the Deal. Things got off to an odd start, Trump would later recall in his own memoir: Kashiwagi retired to his bi-level penthouse suite—featuring ocean views, butler service, a grand piano and an $800,000 jade Buddha—and didn’t emerge for two days. Finally he reappeared on a Friday night. Piles of $5,000 chips awaited him at a table reserved for his play. One $250,000 stack stood over a foot high, according to Trump’s later account.

With his black hair slicked back, Kashiwagi played marathon sessions at a table roped off for his private use. Surrounded by bodyguards and watchful casino officials, he was supplied with hot towels and given a private bathroom; Trump even hired a Japanese chef to cook for him. Amid the opulence, Kashiwagi cut a modest profile. “Sipping tea amid tuxedo-clad baccarat croupiers, Mr. Kashiwagi, in his rumpled blue-striped shirt and plain black slippers, has the look of a quarter slot-machine player just off the bus from Hoboken,” the Wall Street Journal reported at the time.

Dozens of low-rollers peered over a marble wall into a world they could barely fathom. “All that money,” one woman told the Philadelphia Inquirer. “How can anyone… I can't imagine…”

It was just the sort of publicity Trump had been seeking. “That [Kashiwagi] chose Trump Plaza was an enormous coup for us,” O’Donnell wrote. He was “the perfect complement to the world-class image we were marketing, and enhanced the Trump image of elegance and excitement.” Kashiwagi “could propel Trump Plaza into an entirely new realm of action,” O’Donnell believed.

But the great whale Trump had harpooned was threatening to swamp his boat.

“From the very first hand, Kashiwagi started beating the hell out of us,” Trump wrote in Comeback. Trump was down a million dollars within half an hour.

“What the hell am I doing? I asked myself,” he wrote. "Cash flow is way down, and I’m playing with a guy who could win $40 or $50 million in a matter of days.” Suddenly, it became clear that this was a PR triumph that could put the Trump Plaza out of business.

Every casino game has a built-in advantage for the house. But Trump grew alarmed as he focused on the fact that baccarat offers a relatively narrow dealer's edge.

“At that moment I realized for the first time that I had become a gambler,” Trump wrote. Yes, he had speculated on real estate, based on sound judgment. “But this had nothing to do with logic or reason. I was merely sitting on the sidelines watching as one of the best gamblers in the world played against me for $250,000 per hand, seventy times an hour.”

Trump was nervous to his core. In what he says was a first, he called down to the casino floor late that night to check on the ledger. He learned that he was down $4 million—a figure that would soon double. Kashiwagi had so many chips he had to pile them on the floor.

But in public, Trump was typically unflappable. "Have you ever seen action like this?" he told the Inquirer, which had come to document the action at Trump’s behest. He was speaking at 4 a.m.; Trump had stayed up until his casino closed to monitor the first night’s action. "This guy is great, the best in the world. The best."

The ledger swung wildly through the weekend. Kashiwagi went on hot and cold streaks, enduring wild swings of millions of dollars. He played quietly, sometimes just smiling when he lost hands. But at times he flung his cards down in annoyance after losing, or made fists and opened them as if releasing frustrated energy.

He soon decided he’d had enough. He was becoming irritable, and the gawkers and multiplying news stories were spooking a man obsessed with privacy. He abruptly announced that he was headed back to Tokyo.

With $6 million of Donald Trump’s money in his pocket.

“He quit, Jack. What the fuck?” a furious Trump said to O’Donnell. Trump had expected Kashiwagi to play for several days; he’d stayed for only two.

Where many people would retreat into shame and self-recrimination, Donald Trump doubled down. He immediately courted Kashiwagi to make a return visit, like a heavyweight boxing rematch. One Trump executive even publicly proposed a date for Kashiwagi’s return: December 7, the anniversary of Japan’s 1941 attack on Pearl Harbor.

Behind the trademark bluster, however, Trump grew more calculated. Having looked in the mirror and seen a gambler, he reverted to careful strategy. Trump consulted Jess Marcum, a mathematical probabilities expert who had been an early employee of the RAND Corporation—a government-affiliated think tank then better known for modeling nuclear war with the Soviet Union—on how to maximize his odds in a second showdown with Kashiwagi. Marcum knew the only way to compensate for the house’s very slight baccarat advantage, of just over one percent, was to keep the game going for as long as possible. Time was on Trump’s side.

So Marcum and an Atlantic City casino insider named Al Glasgow prepared a report for Trump proposing a “freeze out” agreement. Under the deal, Kashiwagi would bring $12 million to the table and play until he had either doubled it—or lost everything. Even with huge bets, that would take a long time. Marcum simulated the match in detailed hand written notes. Kashiwagi might surge ahead early, he estimated, but after 75 hours at the table – far longer than he had stayed the first time - his chances of winning would fall to 15 percent. The key was to prevent a repeat of Kashiwagi’s first visit, when he had walked out while ahead.

Kashiwagi, presumably fuzzier on the probabilities, agreed to the terms. There was no legal way to hold him to such a deal but Trump felt the men were honor-bound. “Gamblers are honorable, in their own way—at least about gambling,” he later wrote.

***

Kashiwagi returned to Trump Plaza in May, and Trump was again on the casino floor. And once again, his Japanese rival hit an early winning streak. One Trump biographer, Harry Hurt III, described the mogul as “impolitely ‘sweating the action’ in view of Kashiwagi and the other patrons” before excusing himself. After falling behind another $9 million—now $15 million in total over the two sessions—a stunned Trump considered stopping the game. But Marcum convinced him to be patient and wait for the probabilities to work.

The gambling continued for more than five days. In Comeback, Trump recalled hearing from a pit manager that Kashiwagi hit a major losing streak, by pure chance, after his dealers changed from a team of men to a team of women. Losing faith in his expert-generated odds, Trump now seized on the only thing he had left: superstition: “I want those women dealing to this guy all the time,” Trump insisted. “I don’t give a damn if it’s a coincidence or not.” The mogul even called the women directly to make clear he expected them to stay at the table.

Trump’s account, written years later, here diverges significantly from others. In his telling, the Kashiwagi saga unfolded over one epic visit. But several other fuller accounts—including O’Donnell’s detailed recollection and newspaper reports from the time—clearly describe two separate Kashiwagi trips to Atlantic City.

One thing everyone agrees on is that Trump's fortunes took a sudden turn, just as Marcum had predicted. After six days, Trump was up $10 million, meaning he’d won back the $6 million from Kashiwagi’s February visit plus another $4 million.

But there is also disagreement over what happened next. “Remembering our deal, I told my people to stop the play.” Trump wrote in Comeback. Kashiwagi “was not particularly happy about this,” Trump recalled, “but he agreed.” Here Trump cited the gamblers’ credo: “When a deal is made, they usually abide by it.”

Kashiwagi saw things very differently. His aide told reporters that Trump had dishonorably violated their deal by calling off the game early. The deal had reportedly been for play to continue until Kashiwagi either won or lost $12 million. That’s not what happened: Trump called the game after $10 million.

It’s not clear, then, why Trump would later write that he was “[r]emembering our deal"—or why he would say that Kashiwagi agreed to stop play. But if Trump did change the terms of a deal at the last minute, it would not be for the first or last time.

Kashiwagi departed in a rage, with his aide announcing plans for that autographed copy of Art of the Deal. “We are going to burn it soon,” he said.

Trump might not have cared, except that Kashiwagi owed him a lot of money. He had been playing on credit, and left before a $6 million check drawn from a Singapore bank had cleared. Though the facts are unclear, the check apparently bounced or Kashiwagi canceled it. Trump executives publicly threatened lawsuits. Trump’s account in Comeback never mentions any of this, although concerns about his guest’s credit could explain his decision to end their showdown prematurely.

Kashiwagi suggested that Trump, then in significant debt himself, was the one with a credit problem. His aide told the Journal that Trump Plaza had offered his boss a $5,000 shopping spree at Macy’s in Atlantic City—but that the store had rejected Trump’s credit at the register.

“We pity Mr. Trump’s creditors,” said the aide. “No wonder if they panic.” Eventually, they did. All three of Trump’s Atlantic City casinos were bankrupt by 1992. But Akio Kashiwagi didn’t get to enjoy it. He was murdered in early January of that year.

In Trump’s telling, it was Kashiwagi’s visit to his casino that effectively ruined the secretive gambler’s life. He returned home to a media frenzy in Tokyo over his Atlantic City adventure. “One day he completely lost it,” Trump wrote. “He ran outside to get away from two television cameras peering into his window. He tripped over the curb and broke his ankle. His chauffer pulled him into his black Mercedes and sped off.”

“Kashiwagi went into hiding and was never seen again until his body was found hacked to pieces by a samurai sword,” Trump continued. “They never caught the killers.”

Japanese authorities did make an arrest in the case, charging a man the Los Angeles Times described as "a reputed local gangster" acquainted with Kashiwagi's son. The motive was unclear, but Japanese media noted that the killer did not steal Kashiwagi’s diamonds or the hundreds of thousands of dollars stashed in the house.

In a statement to POLITICO, Trump expressed respect for Kashiwagi (though no remorse for his death). “I loved our matches with him,” Trump said. “He was a great player who loved big numbers. He made me a lot of money when money was very tight and the economy was crashing.”

But it’s not clear that Kashiwagi made Trump any money at all. The final ledger is murky. But if Kashiwagi won $6 million on his first trip to Atlantic City, then lost $10 million—and died owing Trump $4 million, then Trump at best broke even. If reports that Kashiwagi cashed in nearly $500,000 in chips on his way out of the casino are correct, then Trump finished in the red.

Trump did get the media attention that had always been part of his plan. But it wasn’t enough to save the Trump Plaza or any of his other properties. Within a couple of years Trump would limp out of Atlantic City altogether, narrowly escaping personal bankruptcy. His great gamble—on Kashiwagi, and on gambling itself—can hardly be called a success. Only in Trump’s world can that kind of wager be called a win.

Correction: This story originally described Jess Marcum as a co-founder of the RAND Corporation. Marcum was an early RAND Corp. employee but not a co-founder. By the time of the events described here, he was no longer working at RAND.